UK won't share pound with independent Scotland, Osborne warns
Published 14/05/2014 | 14:32
A formal currency union between an independent Scotland and the rest of the UK will not happen, George Osborne has told MPs.
The Chancellor said it was a "no ifs, no buts" position as he insisted there would not be a deal to allow Scotland to share sterling after independence.
The three main Westminster parties have all ruled out a currency union, but doubts about the Government's position surfaced earlier this year when an unnamed minister was reported as saying "of course" there would be a deal done to share the pound.
But Mr Osborne said: "The currency is one of the most important issues in the independence debate. All the evidence suggests that people in Scotland value highly the stability and security of the UK pound, backed by the strength of the Bank of England and taxpayers from across the whole of the UK."
He said he wanted Scotland to keep the pound "but the only way this will happen is if we stay together".
"The nationalists' preferred plan is to replace our UK pound with something very different to what we have now, an unstable eurozone-style currency union which wouldn't work at all for Scotland or the UK," he said.
"It's a plan where Scotland leaves the UK but the Scottish nationalists still expect taxpayers in the rest of the UK to continue to provide a safety net.
"It's a plan where the nationalists want to be independent but make Scotland's economic policy dependent on another country in which it no longer has any say or representation.
"That's why it's a plan that simply doesn't make sense."
Mr Osborne told the Commons Scottish Affairs Select Committee: "As Chancellor of the Exchequer it is my obligation to explain that no currency arrangement under independence will be the same as the strength and stability of one UK, with one UK pound.
"The people of Scotland deserve straight answers to straight questions and you have had straight answers from the Labour shadow chancellor, the Liberal Democrat Chief Secretary and from me the Conservative Chancellor.
"We have all made it clear that there will be no currency union if Scotland becomes independent, no ifs, no buts. An independent Scotland would not share the pound with the rest of the UK."
The committee's Labour chairman Ian Davidson said Mr Osborne's announcement that Scotland would not be able to share the pound, made on a visit to Edinburgh, was a "presentational disaster".
He said: "It looked as if it was some English Tory coming up to tell us what we could and couldn't do."
Mr Osborne said he had an obligation to provide the people of Scotland with the facts about the consequences of independence
He told the MPs that the legal position was clear that the rest of the UK would retain the central bank - the Bank of England - which stands behind the pound.
"It is not like a divorce where you are dividing up the CD collection, this is something very different," he said. "This is a fundamental set of arrangements intrinsic to the UK and it's not just a physical asset that would be shared."